Asian capital markets are poised for a strong year in 2026 thanks to high-profile IPOs from China and India. However, rapidly rising technology valuations and concerns about an AI bubble are the most significant risks that could dampen this momentum.
China and India Momentum
According to LSEG data, IPOs in Asia, including over-allotments and convertible bonds, reached a total of $267 billion, marking the first annual increase since 2021.
In the Hong Kong market, favored by Chinese companies, the figure reached $75 billion, more than three times that of last year. In India, $19.3 billion of IPOs are expected to take place by 2025.James Wang, Head of ECM Asia at Goldman Sachs, commented, “China’s recovery and India’s expansion were the two main drivers of exports in Asia this year. We expect them to continue this role in 2026.”
India is projected to generate an IPO volume of close to $20 billion in 2026, while in Hong Kong, over 300 companies are in line for an IPO.
Reliance Jio Platforms’ IPO and Chinese technology manufacturer Zhongji Innolight’s second listing will significantly increase trading volume next year.Investors Moving Away from the US
In recent months, global fund flows have shifted from US assets to Asia. This is driven by uncertainties surrounding US President Donald Trump’s trade and geopolitical policies. The Hong Kong Hang Seng Index has risen by approximately 30% since the beginning of the year, while the Indian NSE index has risen by 10.8%. This momentum has allowed Chinese battery manufacturer CATL to raise $5.3 billion in its second listing in Hong Kong, while Zijin Gold International completed a $3.5 billion initial public offering. The sharp volatility seen in US stock markets in November revealed the fragilities in the global AI rally. The multi-billion dollar IPO plans of major language modeling and chip manufacturers like China’s Zhipu AI, MiniMax, and MetaX have reignited overvaluation debates. Freshfields partner Arun Balasubramanian warned, “If the AI bubble concern turns into a serious sell-off, it could shake not only the technology sector but also overall market risk appetite.” More cautious investors may turn to India, as the country’s market offers a relatively low AI weighting. Pratik Loonker from Axis Capital said, “If there is a correction in global AI valuations, pressure on pricing and valuations will be inevitable.”
While 2026 is expected to be a busy year in Asia thanks to strong economic growth and a comprehensive IPO trail, AI-induced volatility is projected to be a decisive test for regional capital markets.
